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Forest Loss and Economic Inequality in the Solomon Islands: Using Small-Area Estimation to Link Environmental Change to Welfare Outcomes

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  • Gibson, John

Abstract

To study welfare effects of environmental change, data from household surveys may be linked to remote sensing data. Using spatial aggregation to link risks ecological fallacy, since surveys are usually representative for areas larger than the spatial scale of decision-making units. This paper uses survey-to-census imputation to estimate welfare indicators for small areas to study the effect of deforestation on subsequent inequality in the rural Solomon Islands. This country depends on logging for almost half of foreign exchange and one-sixth of government revenue, and most forested land remains under customary ownership. A sharp increase in log exports, to seven times the sustainable yield, and a major shift in export destinations as other countries withdrew from the tropical log trade represents an exogenous shock that helps to identify effects of deforestation on inequality rather than the reverse relationship. A standard deviation increase in the rate of forest loss over 2000 to 2012 raises the Gini index of inequality in 2013 by one-third of a standard deviation. Mean incomes and poverty rates are also higher, implying that deforestation makes some households richer while others become poorer. These precisely estimated effects would be obscured using more spatially aggregated data.

Suggested Citation

  • Gibson, John, 2018. "Forest Loss and Economic Inequality in the Solomon Islands: Using Small-Area Estimation to Link Environmental Change to Welfare Outcomes," Ecological Economics, Elsevier, vol. 148(C), pages 66-76.
    • Handle: RePEc:eee:ecolec:v:148:y:2018:i:c:p:66-76
    DOI: 10.1016/j.ecolecon.2018.02.012
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    Cited by:

    1. Leopoldo Fergusson & Santiago Saavedra & Juan F. Vargas, 2020. "The perils of misusing remote sensing data: The case of forest cover," Documentos de Trabajo 18152, The Latin American and Caribbean Economic Association (LACEA).
    2. Okumu, Boscow & Muchapondwa, Edwin, 2020. "Welfare and forest cover impacts of incentive based conservation: Evidence from Kenyan community forest associations," World Development, Elsevier, vol. 129(C).
    3. Carlo Fezzi & Mauro Derek J. Ford & Kirsten L.L. Oleson, 2022. "The economic value of coral reefs: climate change impacts and spatial targeting of restoration measures," DEM Working Papers 2022/5, Department of Economics and Management.
    4. Xiaoshi Zhou & Wanglin Ma & Gucheng Li & Huanguang Qiu, 2020. "Farm machinery use and maize yields in China: an analysis accounting for selection bias and heterogeneity," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1282-1307, October.
    5. Hai‐Anh H. Dang, 2021. "To impute or not to impute, and how? A review of poverty‐estimation methods in the absence of consumption data," Development Policy Review, Overseas Development Institute, vol. 39(6), pages 1008-1030, November.
    6. John Gibson, 2020. "Deforestation and Resource Conflicts in Papua New Guinea," Working Papers in Economics 20/02, University of Waikato.
    7. Shang Xu & H. Allen Klaiber & Daniela A. Miteva, 2023. "Impacts of forest conservation on local agricultural labor supply: Evidence from the Indonesian forest moratorium," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(3), pages 940-965, May.
    8. Fezzi, Carlo & Ford, Derek J. & Oleson, Kirsten L.L., 2023. "The economic value of coral reefs: Climate change impacts and spatial targeting of restoration measures," Ecological Economics, Elsevier, vol. 203(C).

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    More about this item

    Keywords

    Deforestation; Inequality; Poverty; Small-area estimation;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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